Transcript Reagan*s 1st and 2nd Terms

Reagan’s 1st and 2nd Terms
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Reagan’s Political Career
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When Ronald Reagan began his career as a movie actor in
Hollywood, he became actively involved in the political affairs of the
actors’ union.
Originally, Reagan considered himself a Democrat. However, he
found himself less comfortable with the Democratic Party after
World War II, and joined the Republican Party in the 1950s.
Reagan was elected governor of California in 1966. During his
eight years as governor, Reagan eliminated California’s budget
deficit by modestly increasing taxes, cutting funding to social
programs, and reforming state spending.
Reagan became popular both for his likeable personality and his
conservative values.
Changing the Economy
Supply-Side Economics
 One of Reagan’s main goals was to spur
business growth.
 Reagan believed that supply-side economics,
a strategy that focused on the supply of
goods, would achieve this goal.
 Supply-side economics advocated giving
more money to businesses and investors.
These businesses in turn would hire more
people and produce more goods.
Cutting Taxes
Cutting taxes was another of Reagan’s
priorities.
 In 1986, Congress passed the most
sweeping tax reform in history.
 The 1986 tax reforms eliminated
loopholes, simplified the tax system, and
cut tax rates, especially those of the most
wealthy Americans.
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Changing the Government
Cutting Regulations
 Like President Carter, Reagan wanted to
eliminate government regulations that he
believed stifled free market competition.
 Reagan continued and expanded the
deregulation of the energy, transportation,
and banking industries.
 Reagan also challenged the power of labor
unions, firing many air traffic controllers who
refused to return to work during a 1981
strike.
Slowing Federal Growth
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Cutting the size of the federal government
was among Reagan’s priorities.
Under Reagan, public service jobs were
eliminated, unemployment and welfare
benefits were reduced, and Medicare rates
were raised.
Reagan initiated a plan called the New
Federalism in which the federal government
would no longer tell states exactly how
federal aid had to be used.
Reagan’s Foreign Policy
Reagan was determined to defend American interests in the
Cold War. Part of this involved continuing to build up both
conventional military forces and the nuclear arsenal.
 In 1983, Reagan announced the Strategic Defense Initiative
(SDI), popularly known as “Star Wars.” SDI proposed the
creation of a massive satellite shield in space to intercept and
destroy incoming Soviet missiles.
 Continuing difficulties in the Middle East, especially Libya and
Lebanon, claimed American lives.
 The United States sent aid to groups that were resisting
Communist forces in several Latin American nations. These
nations included El Salvador, Nicaragua, and Grenada.
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The Federal Budget Deficit
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During the 1980
campaign, Reagan had
promised to balance
the federal budget.
However, a
combination of
defense spending and
tax cuts meant that
the federal budget
deficit grew.
Recession and Recovery
During Reagan’s first two years in office, the United States
experienced the worst economic downturn since the Great
Depression.
 By 1983, the economy had begun to recover. Unemployment
and inflation rates fell, and investment rose.
 Those in favor of supply-side economics claimed that the
recovery supported their views. However, one prediction of
this theory did not come true. Cuts in tax rates failed to
generate enough economic growth for the government’s tax
revenues actually to increase.
 Rising budget deficits drew the nation deeper into debt.
Despite this debt, many Americans continued to support
Reagan’s values and policies.
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Patriotic Renewal
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Reagan was reelected President in 1984,
winning a landslide victory over Democratic
opponent Walter Mondale.
Numerous events during Reagan’s second
term celebrated a renewal of patriotism.
These included American victories in the
1984 Olympic Games, which took place in
Los Angeles; the centennial of the Statue of
Liberty in 1986; and the 200th anniversary of
the Constitution in 1987.
Continuing Social Debates
Civil Rights
The number of African American elected officials rose
dramatically during the 1980s, and Martin Luther King, Jr.’s
birthday became a national holiday. However, Reagan appointed
federal judges who were less sympathetic to civil rights goals, and
resistance to affirmative action programs rose.
The Women’s
Movement
As women gained access to new opportunities, opposition to the
women’s movement grew. The proposed Equal Rights Amendment
failed to gain approval, and anti-abortion groups protested the
1973 Roe v. Wade Supreme Court ruling.
Sexual Orientation
The campaign for homosexual rights presented another
controversial issue. The spread of AIDS, or acquired immunodeficiency syndrome, caused alarm.
Conservatives on
the Supreme Court
Reagan appointed conservative judges Sandra Day O’Connor and
Antonin Scalia to the Supreme Court. He also raised conservative
Justice William Rehnquist to the position of Chief Justice.
An Evolving Economy
America’s farmers suffered setbacks during the 1980s.
Oversupply and falling prices put many farmers in
debt. Federal aid helped farmers for the short term
but failed to address underlying problems.
 A decline in the manufacturing industry caused many
workers to lose their jobs. In most cases, workers
found new jobs in other industries, as the United
States economy shifted away from manufacturing.
 Under Reagan, wealthy Americans flourished while
individuals’ wages declined. By the late 1980s, wealth
was more unevenly distributed than at any time since
the end of World War II.
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Reagan’s Hands-off Style
The S & L Scandal
 Reagan favored less government regulation of the
economy.
 Some savings and loan banks (often called S & Ls)
took advantage of new laws to make risky
investments with depositors’ savings.
 When hundreds of S & Ls failed, taxpayers had to
make up the billions of dollars lost.
 A number of bank officials were prosecuted for
their role in the scandal and for their efforts to
cover it up.
The Iran-Contra Affair
 In Nicaragua, the United States secretly
supported guerrillas known as Contras against
the ruling Marxist Sandinistas. This policy violated
American laws on international intervention.
 Congress discovered this violation and, in 1984,
cut off aid to the Contras.
 In what became known as the Iran-Contra affair,
some government officials secretly continued
supporting the Contras using profits from arms
sales to Iran.
The Reagan Legacy
Foreign Policy Success
 Relations between the United States and the
Soviet Union improved during Reagan’s second
term.
 Reagan developed a close relationship with Soviet
leader Mikhail Gorbachev, who advocated policies
of political and economic openness called glasnost
and perestroika.
 The 1987 Intermediate-Range Nuclear Forces
(INF) Treaty provided for the destruction of
thousands of American and Soviet missiles in
Europe.
Domestic Policy Initiatives
 Payments for entitlements, or programs such as
Social Security, Medicare, and Medicaid, which
guarantee payments to a particular group of
recipients, grew faster than policymakers had
expected.
 Investor fears about budget deficits and rising
national debt led to a stock market crash in 1987.
 Despite these setbacks, many Americans viewed
Reagan’s two terms in office as a time of national
pride and confidence.
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